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Buy One, Get One FREE
Pack of No. 2 Pencils Only $1
Glue Sticks 25¢ each
Packs of Paper $1

It’s that time of year again: students of all ages are making
preparations to return to school, and retailers are hitting us
heavily with SALES! We’ve all figured it out by now that a sale
doesn’t always mean there will be savings. Children see right
through it: a sale simply implies Mom and Dad can spend more,
right? All jokes aside, is there an education credit or deduction
for all those gearhungry.com pencils and school supplies when it comes time to file your
taxes?

Most education credits are designed for higher
education. Teachers and various other educators can take a
deduction on supplies they purchase, but  parents purchasing
school supplies for their school-aged children cannot. But if you
have a child or dependent in college, you may claim the American
Opportunity Credit, the Lifetime Learning Credit, Student Loan
Interest Deduction, or Tuition and Fees Deduction. Let’s look at
each one briefly.

The American Opportunity Credit was created to
offset the costs of higher education by reducing your income tax.
You may take up to $2,500 for qualified education expenses paid for
each eligible student for up to four years. As with all good
things, there are rules and qualifications. To claim this credit,
all three of the following must be met:

• You pay qualified education expenses of eligible higher
  education.
• You pay the education expenses for a qualified eligible
  student.
• The eligible student is yourself, your spouse, or a dependent
  for whom you claim an exemption on your tax return.

Like the American Opportunity Credit, the Lifetime
Learning Credit is also used to offset costs associated
with higher education. However, as the name implies, there is no
limit to the amount of time you can claim this credit. You may
claim up to $2,000 each year for qualified education expenses paid
for all eligible students. The same  requirements above also
apply if you want to take the Lifetime Learning Credit.

A couple of deductions you may be able to use are the
Student Loan Interest Deduction or the
Tuition and Fees Deduction. If your modified
adjusted gross income is less than $75,000 ($150,000 for married
filing jointly), you may use the Student Loan Interest Deduction
for paying interest on a loan for higher education. This deduction
will reduce the amount of your taxable income by up to $2,500.

With the Tuition and Fees Deduction you may be able to deduct
qualified education expenses paid during the year for yourself,
your spouse, or for your dependent(s). The qualified education
expenses must be for higher education and this deduction may reduce
your taxable income by $4,000.

For more information about these education credits and
deductions, please refer to Publication 970.